1.1 	A bill for an act
1.2 	relating to the environment; proposing an amendment to the Minnesota 
1.3 	Constitution, article XI; creating the Clean Water Legacy Act; providing 
1.4 	authority, direction, and funding to achieve and maintain water quality standards 
1.5 	for Minnesota's surface waters in accordance with section 303(d) of the federal 
1.6 	Clean Water Act; modifying soil and water cost-share contract provisions; 
1.7 	extending citizen water monitoring; creating a municipal grant program; 
1.8 	appropriating money; amending Minnesota Statutes 2004, sections 103C.501, 
1.9 	subdivision 5; 115.06, subdivision 4; 116.182, subdivision 2; 276.04, subdivision 
1.10 	2; 276.112; 290A.03, subdivisions 11, 13; 297A.62, subdivision 1; 297A.94; 
1.11 	proposing coding for new law in Minnesota Statutes, chapter 446A; proposing 
1.12 	coding for new law as Minnesota Statutes, chapter 114D.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	ARTICLE 1
1.15 	 CLEAN WATER LEGACY

1.16 	Section 1. Minnesota Statutes 2004, section 103C.501, subdivision 5, is amended to 
1.17 	read:
1.18 		Subd. 5.Contracts by districts.  (a) A district board may contract on a cost-share 
1.19 	basis to furnish financial aid to a land occupier or to a state agency for permanent systems 
1.20 	for erosion or sedimentation control or water quality improvement that are consistent with 
1.21 	the district's comprehensive and annual work plans.
1.22 	(b) The duration of the contract may must, at a minimum,be the time required to 
1.23 	complete the planned systems.  A contract must specify that the land occupier is liable 
1.24 	for monetary damages, not to exceed the and penalties in an amount of up to 150 percent 
1.25 	of the financial assistance received from the district, for failure to complete the systems 
1.26 	or practices in a timely manner or maintain the systems or practices as specified in the 
1.27 	contract.
2.1 	(c) A contract may provide for cooperation or funding with federal agencies.  A land 
2.2 	occupier or state agency may provide the cost-sharing portion of the contract through 
2.3 	services in kind.
2.4 	(d) The state board or the district board may not furnish any financial aid for 
2.5 	practices designed only to increase land productivity.
2.6 	(e) When a district board determines that long-term maintenance of a system or 
2.7 	practice is desirable, the board may require that such maintenance be made a covenant 
2.8 	upon the land for the effective life of the practice.  A covenant under this subdivision shall 
2.9 	be construed in the same manner as a conservation restriction under section 84.65.

2.10 	Sec. 2. [114D.05] CITATION.
2.11 	This chapter may be cited as the "Clean Water Legacy Act." 

2.12 	Sec. 3. [114D.10] LEGISLATIVE PURPOSE.
2.13 	The purpose of the Clean Water Legacy Act is to restore, protect, and preserve the 
2.14 	quality of Minnesota's surface waters by providing authority, direction, and resources to 
2.15 	restore and maintain water quality standards for surface waters as required by section 
2.16 	303(d) of the federal Clean Water Act, United States Code, title 33, section 1313(d), 
2.17 	and applicable federal regulations.

2.18 	Sec. 4. [114D.15] DEFINITIONS.
2.19 		Subdivision 1.Application. The definitions provided in this section apply to the 
2.20 	terms used in this chapter.
2.21 		Subd. 2.Citizen monitoring. "Citizen monitoring" means monitoring of surface 
2.22 	water quality by individuals and nongovernmental organizations that is consistent with 
2.23 	section 115.06, subdivision 4, and Pollution Control Agency guidance on monitoring 
2.24 	procedures, quality assurance protocols, and data management.
2.25 		Subd. 3.Clean water council. "Clean Water Council" or "council" means the Clean 
2.26 	Water Council created pursuant to section 114D.30, subdivision 1.
2.27 		Subd. 4.Federal tmdl requirements. "Federal TMDL requirements" means the 
2.28 	requirements of section 303(d) of the Clean Water Act, United States Code, title 33, 
2.29 	section 1313(d), and associated regulations and guidance.
2.30 		Subd. 5.Impaired water. "Impaired water" means surface water that does not 
2.31 	meet applicable water quality standards.
2.32 		Subd. 6.Public agencies. "Public agencies" means all state agencies, political 
2.33 	subdivisions, joint powers organizations, and special purpose units of government with 
3.1 	authority, responsibility, or expertise in protecting, restoring, or preserving the quality of 
3.2 	surface waters, managing or planning for surface waters and related lands, or financing 
3.3 	waters-related projects.  "Public agencies" also includes the University of Minnesota and 
3.4 	other public education institutions.
3.5 		Subd. 7.Restoration. "Restoration" means actions, including effectiveness 
3.6 	monitoring, that are taken to restore and maintain water quality standards for impaired 
3.7 	waters in accordance with a TMDL that has been approved by the United States 
3.8 	Environmental Protection Agency under federal TMDL requirements.
3.9 		Subd. 8.Surface waters. "Surface waters" means waters of the state as defined 
3.10 	in section 115.01, subdivision 22, excluding groundwater as defined in section 115.01, 
3.11 	subdivision 6.
3.12 		Subd. 9.Third-party tmdl. "Third-party TMDL" means a TMDL by the 
3.13 	Pollution Control Agency that is developed in whole or in part cooperatively between 
3.14 	representatives from local units of government where the TMDL is being completed and 
3.15 	a qualified public or private nonprofit entity other than the Pollution Control Agency 
3.16 	consistent with the goals, policies, and priorities in section 114D.20.
3.17 		Subd. 10.Total maximum daily load or tmdl. "Total maximum daily load" or 
3.18 	"TMDL" means a scientific study that contains a calculation of the maximum amount of a 
3.19 	pollutant that may be introduced into a surface water and still ensure that applicable 
3.20 	water quality standards for that water are restored and maintained.  A TMDL also is 
3.21 	the sum of the pollutant load allocations for all sources of the pollutant, including a 
3.22 	wasteload allocation for point sources, a load allocation for nonpoint sources and natural 
3.23 	background, an allocation for future growth of point and nonpoint sources, and a margin 
3.24 	of safety to account for uncertainty about the relationship between pollutant loads and 
3.25 	the quality of the receiving surface water. "Natural background" means characteristics of 
3.26 	the water body resulting from the multiplicity of factors in nature, including climate and 
3.27 	ecosystem dynamics, that affect the physical, chemical, or biological conditions in a water 
3.28 	body, but does not include measurable and distinguishable pollution that is attributable to 
3.29 	human activity or influence.  A TMDL must take into account seasonal variations.
3.30 		Subd. 11.Tmdl implementation plan. "TMDL implementation plan" means a 
3.31 	document detailing restoration activities needed to meet the approved TMDL's pollutant 
3.32 	load allocations for point and nonpoint sources.
3.33 		Subd. 12.Water quality standards. "Water quality standards" for Minnesota 
3.34 	surface waters are found in Minnesota Rules, chapters 7050 and 7052.

4.1 	Sec. 5. [114D.20] IMPLEMENTATION; COORDINATION; GOALS; 
4.2 	POLICIES; AND PRIORITIES.
4.3 		Subdivision 1.Coordination and cooperation. In implementing this chapter, 
4.4 	public agencies and private entities shall take into consideration the relevant provisions of 
4.5 	local and other applicable water management, conservation, land use, land management, 
4.6 	and development plans and programs.  Public agencies with authority for local water 
4.7 	management, conservation, land use, land management, and development plans shall 
4.8 	take into consideration the manner in which their plans affect the implementation of 
4.9 	this chapter.  Public agencies shall identify opportunities to participate and assist in the 
4.10 	successful implementation of this chapter, including the funding or technical assistance 
4.11 	needs, if any, that may be necessary. In implementing this chapter, public agencies shall 
4.12 	endeavor to engage the cooperation of organizations and individuals whose activities 
4.13 	affect the quality of surface waters, including point and nonpoint sources of pollution, and 
4.14 	who have authority and responsibility for water management, planning, and protection. To 
4.15 	the extent practicable, public agencies shall endeavor to enter into formal and informal 
4.16 	agreements and arrangements with federal agencies and departments to jointly utilize 
4.17 	staff and educational, technical, and financial resources to deliver programs or conduct 
4.18 	activities to achieve the intent of this chapter, including efforts under the federal Clean 
4.19 	Water Act and other federal farm and soil and water conservation programs.
4.20 		Subd. 2.Goals for implementation. The following goals must guide the 
4.21 	implementation of this chapter:
4.22 	(1) to identify impaired waters in accordance with federal TMDL requirements 
4.23 	within ten years after the effective date of this section and thereafter to ensure continuing 
4.24 	evaluation of surface waters for impairments;
4.25 	(2) to submit TMDL's to the United States Environmental Protection Agency for all 
4.26 	impaired waters in a timely manner in accordance with federal TMDL requirements;
4.27 	(3) to set a reasonable time for implementing restoration of each identified impaired 
4.28 	water;
4.29 	(4) to provide assistance and incentives to prevent waters from becoming impaired 
4.30 	and to improve the quality of waters which are listed as impaired but have no approved 
4.31 	TMDL addressing the impairment;
4.32 	(5) to promptly seek the delisting of waters from the impaired waters list when those 
4.33 	waters are shown to achieve the designated uses applicable to the waters; and 
4.34 	(6) to achieve compliance with federal Clean Water Act requirements in Minnesota.
4.35 		Subd. 3.Implementation policies. The following policies must guide the 
4.36 	implementation of this chapter:
5.1 	(1) develop regional and watershed TMDL's and TMDL implementation plans, and 
5.2 	TMDL's and TMDL implementation plans for multiple pollutants, where reasonable and 
5.3 	feasible;
5.4 	(2) maximize use of available organizational, technical, and financial resources to 
5.5 	perform sampling, monitoring, and other activities to identify impaired waters, including 
5.6 	use of citizen monitoring;
5.7 	(3) maximize opportunities for restoration of impaired waters, by prioritizing and 
5.8 	targeting of available programmatic, financial, and technical resources and by providing 
5.9 	additional state resources to complement and leverage available resources;
5.10 	(4) use existing regulatory authorities to achieve restoration for point and nonpoint 
5.11 	sources of pollution where applicable, and promote the development and use of effective 
5.12 	nonregulatory measures to address pollution sources for which regulations are not 
5.13 	applicable;
5.14 	(5) use restoration methods that have a demonstrated effectiveness in reducing 
5.15 	impairments and provide the greatest long-term positive impact on water quality protection 
5.16 	and improvement while incorporating innovative approaches on a case-by-case basis;
5.17 	(6) identify for the legislature any innovative approaches that may strengthen or 
5.18 	complement existing programs;
5.19 	(7) identify and encourage implementation of measures to prevent waters from 
5.20 	becoming impaired and to improve the quality of waters that are listed as impaired but 
5.21 	have no approved TMDL addressing the impairment; and 
5.22 	(8) monitor and enforce cost-sharing contracts and impose monetary damages in an 
5.23 	amount up to 150 percent of the financial assistance received for failure to comply.
5.24 		Subd. 4.Priorities for identifying impaired waters. The Pollution Control 
5.25 	Agency, in accordance with federal TMDL requirements, shall set priorities for identifying 
5.26 	impaired waters, giving consideration to:
5.27 	(1) waters where impairments would pose the greatest potential risk to human or 
5.28 	aquatic health; and 
5.29 	(2) waters where data developed through public agency or citizen monitoring or 
5.30 	other means, provides scientific evidence that an impaired condition exists.
5.31 	Subd. 5.[PRIORITIES FOR PREPARATION OF TMDL'S.] The Clean Water 
5.32 	Council shall recommend priorities for scheduling and preparing TMDL's and TMDL 
5.33 	implementation plans, taking into account the severity of the impairment, the designated 
5.34 	uses of those waters, and other applicable federal TMDL requirements. In recommending 
5.35 	priorities, the council shall also give consideration to waters and watersheds:
5.36 	(1) with impairments that pose the greatest potential risk to human health;
6.1 	(2) with impairments that pose the greatest potential risk to aquatic health;
6.2 	(3) where other public agencies and participating organizations and individuals, 
6.3 	especially local, basinwide, watershed, or regional agencies or organizations, have 
6.4 	demonstrated readiness to assist in carrying out the responsibilities, including availability 
6.5 	and organization of human, technical, and financial resources necessary to undertake 
6.6 	the work; and 
6.7 	(4) where there is demonstrated coordination and cooperation among cities, 
6.8 	counties, watershed districts, and soil and water conservation districts in planning and 
6.9 	implementation of activities that will assist in carrying out the responsibilities.
6.10 		Subd. 6.Priorities for restoration of impaired waters. In implementing 
6.11 	restoration of impaired waters, in addition to the priority considerations in subdivision 5 
6.12 	the Clean Water Council shall give priority in its recommendations for restoration funding 
6.13 	from the clean water legacy account to restoration projects that:
6.14 	(1) coordinate with and utilize existing local authorities and infrastructure for 
6.15 	implementation;
6.16 	(2) can be implemented in whole or in part by providing support for existing or 
6.17 	ongoing restoration efforts; and 
6.18 	(3) most effectively leverage other sources of restoration funding, including federal, 
6.19 	state, local, and private sources of funds; and 
6.20 	(4) show a high potential for early restoration and delisting based upon scientific 
6.21 	data developed through public agency or citizen monitoring or other means.
6.22 		Subd. 7.Priorities for funding prevention actions. The Clean Water Council 
6.23 	shall apply the priorities applicable under subdivision 6, as far as practicable, when 
6.24 	recommending priorities for funding actions to prevent waters from becoming impaired 
6.25 	and to improve the quality of waters which are listed as impaired but have no approved 
6.26 	TMDL.

6.27 	Sec. 6. [114D.25] ADMINISTRATION; POLLUTION CONTROL AGENCY.
6.28 		Subdivision 1.General duties and authorities. (a) The Pollution Control Agency, 
6.29 	in accordance with federal TMDL requirements, shall:  identify impaired waters and 
6.30 	propose a list of the waters for review and approval by the United States Environmental 
6.31 	Protection Agency; develop and approve TMDL's for listed impaired waters and submit 
6.32 	the approved TMDL's to the United State Environmental Protection Agency for final 
6.33 	approval; and propose to delist waters from the Environmental Protection Agency 
6.34 	impaired waters list.
7.1 	(b) A TMDL must include a statement of the facts and scientific data supporting the 
7.2 	TMDL and a list of potential implementation options, including a range of estimates of 
7.3 	the cost of implementation and individual wasteload data for any point sources addressed 
7.4 	by the TMDL.
7.5 	(c) The implementation information need not be sent to the United States 
7.6 	Environmental Protection Agency for review and approval.
7.7 		Subd. 2.Administrative procedures for tmdl approval. The approval of a TMDL 
7.8 	by the Pollution Control Agency is a final decision of the agency for purposes of section 
7.9 	115.05, and is subject to the contested case procedures of sections 14.57 to 14.62 in 
7.10 	accordance with agency procedural rules.  The agency shall not submit an approved TMDL 
7.11 	to the United States Environmental Protection Agency until the time for commencing 
7.12 	judicial review has run or the judicial review process has been completed.  A TMDL is not 
7.13 	subject to the rulemaking requirements of chapter 14, including section 14.386.
7.14 		Subd. 3.Tmdl submittal requirement. Before submitting a TMDL to the United 
7.15 	States Environmental Protection Agency, the Pollution Control Agency shall comply with 
7.16 	the notice and procedure requirements of this section.  If a contested case proceeding is not 
7.17 	required for a proposed TMDL, the agency may submit the TMDL to the United States 
7.18 	Environmental Protection Agency no earlier than 30 days after the notice required in 
7.19 	subdivision 4.  If a contested case proceeding is required for a TMDL, the TMDL may be 
7.20 	submitted to the United States Environmental Protection Agency after the contested case 
7.21 	proceeding and appeal process is completed.
7.22 		Subd. 4.Tmdl notice; contents. The Pollution Control Agency shall give notice of 
7.23 	its intention to submit a TMDL to the United States Environmental Protection Agency. 
7.24 	The notice must be given by publication in the State Register and by United States mail to 
7.25 	persons who have registered their names with the agency.  The notice must include either a 
7.26 	copy of the proposed TMDL or an easily readable and understandable description of its 
7.27 	nature and effect and an announcement of how free access to the proposed TMDL can 
7.28 	be obtained.  In addition, the agency shall make reasonable efforts to notify persons or 
7.29 	classes of persons who may be significantly affected by the TMDL by giving notice of 
7.30 	its intention in newsletters, newspapers, or other publications, or through other means of 
7.31 	communication.  The notice must include a statement informing the public:
7.32 	(1) that the public has 30 days in which to submit comment in support of or in 
7.33 	opposition to the proposed TMDL and that comment is encouraged;
7.34 	(2) that each comment should identify the portion of the proposed TMDL addressed, 
7.35 	the reason for the comment, and any change proposed;
8.1 	(3) of the manner in which persons must request a contested case proceeding on 
8.2 	the proposed TMDL;
8.3 	(4) that the proposed TMDL may be modified if the modifications are supported by 
8.4 	the data and views submitted; and 
8.5 	(5) the date on which the 30-day comment period ends.
8.6 		Subd. 5.Third-party tmdl development. The Pollution Control Agency may enter 
8.7 	agreements with any qualified public or private nonprofit entity setting forth the terms and 
8.8 	conditions under which that entity is authorized to develop a third-party TMDL.  Before 
8.9 	entering into an agreement with an entity to develop a third-party TMDL, the Pollution 
8.10 	Control Agency must make reasonable efforts to notify cities, counties, townships, soil and 
8.11 	water conservation districts, and watershed districts in the area that would be affected by 
8.12 	the TMDL.  An agreement with a private nonprofit entity must require active involvement 
8.13 	in the process by the Pollution Control Agency and appointment of an advisory committee 
8.14 	to provide oversight of the development of the TMDL.  At least 60 percent of the members 
8.15 	of the advisory committee must be representatives of local public agencies from the area 
8.16 	affected by the TMDL.  In determining whether an entity is qualified to develop a TMDL, 
8.17 	the agency shall consider the technical and administrative qualifications of the entity and 
8.18 	may not enter into an agreement with a third-party entity that has a conflict of interest 
8.19 	with respect to the development of the third-party TMDL.  A TMDL developed by a 
8.20 	third party is subject to monitoring, modification, and approval by the Pollution Control 
8.21 	Agency, and must be approved by the Pollution Control Agency before it is submitted to 
8.22 	the United States Environmental Protection Agency.  Before submitting a TMDL to the 
8.23 	Environmental Protection Agency, the Pollution Control Agency must comply with the 
8.24 	notice and procedure requirements of subdivision 3.  Approval of a third-party TMDL by 
8.25 	the Pollution Control Agency is subject to judicial review and contested case procedures 
8.26 	in the same manner as approval of any other TMDL by the Pollution Control Agency.  The 
8.27 	Pollution Control Agency shall only consider authorizing the development of TMDL's 
8.28 	consistent with the goals, policies, and priorities determined under this section.

8.29 	Sec. 7. [114D.30] CLEAN WATER COUNCIL.
8.30 		Subdivision 1.Creation; duties. A Clean Water Council is created to advise the 
8.31 	Pollution Control Agency and other implementing public agencies on the administration 
8.32 	and implementation of this chapter, and foster coordination and cooperation as described 
8.33 	in section 114D.20, subdivision 1.  The council may also advise on the development 
8.34 	of appropriate processes for expert scientific review as described in section 114D.35, 
8.35 	subdivision 2.  The Pollution Control Agency shall provide administrative support for the 
9.1 	council with the support of other member agencies.  The members of the council shall 
9.2 	elect a chair from the nonagency members of the council.
9.3 		Subd. 2.Membership; appointment. The governor must appoint the members of 
9.4 	the council.  The governor must appoint one person from each of the following agencies: 
9.5 	the Department of Natural Resources, the Department of Agriculture, the Pollution 
9.6 	Control Agency, and the Board of Water and Soil Resources.  The governor must appoint 
9.7 	14 additional nonagency members of the council as follows:
9.8 	(1) two members representing statewide farm organizations;
9.9 	(2) two members representing business organizations;
9.10 	(3) two members representing environmental organizations;
9.11 	(4) one member representing soil and water conservation districts;
9.12 	(5) one member representing watershed districts;
9.13 	(6) one member representing nonprofit organizations focused on improvement of 
9.14 	Minnesota lakes or streams;
9.15 	(7) one member representing an organization of county governments;
9.16 	(8) two members representing organizations of city governments;
9.17 	(9) one member representing the Metropolitan Council established under section 
9.18 	473.123; and 
9.19 	(10) one member representing an organization of township governments.
9.20 	In making appointments, the governor must attempt to provide for geographic 
9.21 	balance.
9.22 		Subd. 3.Terms; compensation; removal. The initial terms of members 
9.23 	representing state agencies and the Metropolitan Council expire on the first Monday in 
9.24 	January, 2007. Thereafter, the terms of members representing the state agencies and the 
9.25 	Metropolitan Council are four years and are coterminous with the governor.  The terms 
9.26 	of other members of the council shall be as provided in section 15.059, subdivision 2. 
9.27 	Members may serve until their successors are appointed and qualify. Compensation and 
9.28 	removal of council members is as provided in section 15.059, subdivisions 3 and 4.  A 
9.29 	vacancy on the council may be filled by the appointing authority provided in subdivision 1 
9.30 	for the remainder of the unexpired term.
9.31 		Subd. 4.Implementation plan. The Clean Water Council shall prepare a plan for 
9.32 	implementation of this chapter.  The plan shall address general procedures and timeframes 
9.33 	for implementing this chapter, and shall include a more specific implementation work plan 
9.34 	for the next fiscal biennium and a framework for setting priorities to address impaired 
9.35 	waters consistent with section 114D.45, subdivisions 2 to 7.  The council shall issue the 
10.1 	first implementation plan under this subdivision by December 1, 2005, and shall issue a 
10.2 	revised work plan by December 1 of each even-numbered year thereafter.
10.3 		Subd. 5.Recommendations on appropriation of funds. The Clean Water Council 
10.4 	shall recommend to the governor the manner in which money from the clean water legacy 
10.5 	account should be appropriated for the purposes identified in section 114D.45, subdivision 
10.6 	3.  The council's recommendations must be consistent with the purposes, policies, goals, 
10.7 	and priorities in sections 114D.05 to 114D.35, and shall allocate adequate support and 
10.8 	resources to identify impaired waters, develop TMDL's, develop TMDL implementation 
10.9 	plans, implement restoration of impaired waters, and provide assistance and incentives 
10.10 	to prevent waters from becoming impaired and improve the quality of waters which are 
10.11 	listed as impaired but have no approved TMDL.  The council must recommend methods of 
10.12 	ensuring that awards of grants, loans, or other funds from the clean water legacy account 
10.13 	specify the outcomes to be achieved as a result of the funding, and specify standards to 
10.14 	hold the recipient accountable for achieving the desired outcomes.
10.15 		Subd. 6.Biennial report to legislature. By December 1 of each even-numbered 
10.16 	year, the council shall submit a report to the legislature on the activities for which money 
10.17 	from the clean water legacy account has been or will be spent for the current biennium, and 
10.18 	the activities for which money from the account is recommended to be spent in the next 
10.19 	biennium.  The report due on December 1, 2014, must include an evaluation of the progress 
10.20 	made through June 30, 2014, in implementing this chapter, the need for funding of future 
10.21 	implementation of those sections, and recommendations for the sources of such funding.

10.22 	Sec. 8. [114D.35] PUBLIC AND STAKEHOLDER PARTICIPATION; 
10.23 	SCIENTIFIC REVIEW; EDUCATION.
10.24 		Subdivision 1.Public and stakeholder participation. Public agencies and private 
10.25 	entities involved in the implementation of this chapter shall encourage participation by 
10.26 	the public and stakeholders, including local citizens, land owners and managers, and 
10.27 	public and private organizations, in the identification of impaired waters, in developing 
10.28 	TMDL's, and in planning, priority setting, and implementing restoration of impaired 
10.29 	waters.  In particular, the Pollution Control Agency shall make reasonable efforts to 
10.30 	provide timely information to the public and to stakeholders about impaired waters that 
10.31 	have been identified by the agency.  The agency shall seek broad and early public and 
10.32 	stakeholder participation in scoping the activities necessary to develop a TMDL, including 
10.33 	the scientific models, methods, and approaches to be used in TMDL development, and to 
10.34 	implement restoration pursuant to section 114D.15, subdivision 7.
11.1 		Subd. 2.Expert scientific advice. The Clean Water Council and public agencies 
11.2 	and private entities shall make use of available public and private expertise from 
11.3 	educational, research, and technical organizations, including the University of Minnesota 
11.4 	and other higher education institutions, to provide appropriate independent expert advice 
11.5 	on models, methods, and approaches used in identifying impaired waters, developing 
11.6 	TMDL's, and implementing prevention and restoration.
11.7 		Subd. 3.Education. The Clean Water Council shall develop strategies for 
11.8 	informing, educating, and encouraging the participation of citizens, stakeholders, 
11.9 	and others regarding the identification of impaired waters, development of TMDL's, 
11.10 	development of TMDL implementation plans, and implementation of restoration for 
11.11 	impaired waters.  Public agencies shall be responsible for implementing the strategies.

11.12 	Sec. 9. [114D.40] CLEAN WATER FEES.
11.13 		Subdivision 1.Imposition. A state clean water fee shall annually be imposed on all 
11.14 	parcels of improved property within the state, as provided under this section, except that 
11.15 	no fee shall be imposed on parcels containing improvements that are less than or equal to 
11.16 	$5,000 in value.  The value determined by the assessor shall govern the proper amount of 
11.17 	the fee, except for those properties that are valued and assessed by the commissioner of 
11.18 	revenue, in which case the commissioner's value shall govern the proper amount of the fee.
11.19 		Subd. 2.Agricultural and residential property. For all improved property 
11.20 	classified under section 273.13 as class 2 agricultural, class 1a or 1b residential homestead, 
11.21 	class 4b or 4bb residential nonhomestead, or class 4c noncommercial seasonal residential 
11.22 	recreational, the fee shall be $18, if the value of the improvement is greater than $5,000 but 
11.23 	not greater than $50,000; or $36, if the value of the improvement is greater than $50,000.
11.24 		Subd. 3.Multiple-unit residential housing. For all improved property classified 
11.25 	under section 273.13 as class 4a apartment property, the fee shall be $18 per unit of 
11.26 	housing.
11.27 		Subd. 4.Business property. For all improved property classified under section 
11.28 	273.13 as class 3 commercial-industrial public utility, class 1c or class 4c commercial 
11.29 	seasonal residential recreational, or class 5, the fee shall be:
11.30 	(i) $60, if the value of the improvement or improvements is greater than $5,000 but 
11.31 	not greater than $50,000;
11.32 	(ii) $120, if the value of the improvement or improvements is greater than $50,000 
11.33 	but not greater than $500,000;
11.34 	(iii) $300, if the value of the improvement or improvements is greater than $500,000 
11.35 	but less than $1,000,000; or 
12.1 	(iv) $600, if the value of the improvement or improvements is greater than 
12.2 	$1,000,000.
12.3 		Subd. 5.Exempt property. For all improved property that is exempt from property 
12.4 	taxation, the fee is $60.
12.5 		Subd. 6.Assessment and collection of fee. (a) For taxable parcels of property, the 
12.6 	fee shall be extended against the property by the county on the tax lists for the current 
12.7 	year.  The fee shall be listed on the property tax statement on a separate line.  It shall be 
12.8 	collected at the same time and in the same manner as all other property taxes.  The fee 
12.9 	imposed under this section is a lien upon the property assessed to the same extent and for 
12.10 	the same duration as the property taxes.
12.11 	(b) For property exempt from property taxation, the fee shall be assessed by the 
12.12 	county directly on the property owner and shall be collected and distributed in the same 
12.13 	manner as special assessments under chapter 429 are collected and distributed.
12.14 		Subd. 7.Settlement. The fee, less the cost to collect fees, shall be remitted to 
12.15 	the state commissioner of revenue at the same time and in the same manner as the state 
12.16 	general tax under section 275.025.  The commissioner of revenue shall deposit the fees 
12.17 	collected in the clean water legacy account under section 114D.45.

12.18 	EFFECTIVE DATE. This section is effective for fees payable in 2006 through 
12.19 	2015, except that if the constitutional amendment proposed in article 2 is adopted at the 
12.20 	2006 general election, then no fees may be imposed under this section after fees payable 
12.21 	in 2007.

12.22 	Sec. 10. [114D.45] CLEAN WATER LEGACY ACCOUNT.
12.23 		Subdivision 1.Creation. The clean water legacy account is created as an account 
12.24 	in the environmental fund.  Money in the account must only be made available for 
12.25 	the implementation of this chapter and sections 446A.073 and 446A.074, without 
12.26 	supplanting or taking the place of any other funds which are currently available or may 
12.27 	become available from any other source, whether federal, state, local, or private, for 
12.28 	implementation of those sections.
12.29 		Subd. 2.Sources of revenue. The following revenues must be deposited in the 
12.30 	clean water legacy account:
12.31 	(1) the revenue from the clean water fees collected under section 114D.40; and 
12.32 	(2) interest accrued on the account.
12.33 		Subd. 3.Uses of account. Subject to appropriation by the legislature, the clean 
12.34 	water legacy account may only be used for the following purposes:
13.1 	(1) to provide grants, loans, and technical assistance to public agencies and others 
13.2 	who are participating in the process of identifying impaired waters, developing TMDL's 
13.3 	and TMDL implementation plans, implementing restoration of impaired waters, and 
13.4 	monitoring the effectiveness of restoration;
13.5 	(2) to support measures to prevent waters from becoming impaired and to improve 
13.6 	the quality of waters that are listed as impaired but have no approved TMDL addressing 
13.7 	the impairment;
13.8 	(3) to provide grants and loans for wastewater and stormwater treatment projects 
13.9 	through the Public Facilities Authority;
13.10 	(4) to support the efforts of public agencies associated with individual sewage 
13.11 	treatment systems and financial assistance for upgrading and replacing the systems; and 
13.12 	(5) to provide funds to state agencies to carry out their responsibilities under this 
13.13 	chapter.

13.14 	Sec. 11. Minnesota Statutes 2004, section 115.06, subdivision 4, is amended to read:
13.15 		Subd. 4.Citizen monitoring of water quality.  (a) The agency may encourage 
13.16 	citizen monitoring of ambient water quality for public waters by:
13.17 	(1) providing technical assistance to citizen and local group water quality monitoring 
13.18 	efforts;
13.19 	(2) integrating citizen monitoring data into water quality assessments and agency 
13.20 	programs, provided that the data adheres to agency quality assurance and quality control 
13.21 	protocols; and
13.22 	(3) seeking public and private funds to:
13.23 	(i) collaboratively develop clear guidelines for water quality monitoring procedures 
13.24 	and data management practices for specific data and information uses;
13.25 	(ii) distribute the guidelines to citizens, local governments, and other interested 
13.26 	parties;
13.27 	(iii) improve and expand water quality monitoring activities carried out by the 
13.28 	agency; and
13.29 	(iv) continue to improve electronic and Web access to water quality data and 
13.30 	information about public waters that have been either fully or partially assessed.
13.31 	(b) This subdivision does not authorize a citizen to enter onto private property 
13.32 	for any purpose.
13.33 	(c) By January 15 of each odd-numbered year, the commissioner shall report to the 
13.34 	senate and house of representatives committees with jurisdiction over environmental 
13.35 	policy and finance on activities under this section.
14.1 	(d) This subdivision shall sunset June 30, 2005.

14.2 	Sec. 12. Minnesota Statutes 2004, section 116.182, subdivision 2, is amended to read:
14.3 		Subd. 2.Applicability.  This section governs the commissioner's certification of 
14.4 	projects seeking financial assistance under section 103F.725, subdivision 1a, 446A.07, or 
14.5 	 446A.072, or 446A.075.

14.6 	Sec. 13. [446A.073] CLEAN WATER LEGACY PHOSPHORUS REDUCTION 
14.7 	GRANTS.
14.8 		Subdivision 1.Creation of fund. The authority shall establish a clean water legacy 
14.9 	capital improvement fund and shall make grants from the fund as provided in this section.
14.10 		Subd. 2.Grants. The authority shall award grants from the clean water legacy 
14.11 	capital improvement fund to governmental units for the capital costs of wastewater 
14.12 	treatment facility projects or a portion thereof that will reduce the discharge of total 
14.13 	phosphorus from the facility to one milligram per liter or less.  A project is eligible for a 
14.14 	grant if it meets the following requirements:
14.15 	(1) the applicable phosphorus discharge limit is incorporated in a permit issued by 
14.16 	the agency for the wastewater treatment facility on or after March 28, 2000, the grantee 
14.17 	agrees to comply with the applicable limit as a condition of receiving the grant, or the 
14.18 	grantee made improvements to a wastewater treatment facility on or after March 28, 2000, 
14.19 	that include infrastructure to reduce the discharge of total phosphorus to one milligram 
14.20 	per liter or less;
14.21 	(2) the governmental unit has submitted a facilities plan for the project to the agency 
14.22 	and a grant application to the authority on a form prescribed by the authority; and 
14.23 	(3) the agency has approved the facilities plan, and certified the eligible costs for the 
14.24 	project to the authority.
14.25 		Subd. 3.Eligible capital costs. Eligible capital costs for phosphorus reduction 
14.26 	grants under subdivision 4, paragraph (a), include the as-bid construction costs and 
14.27 	engineering planning and design costs.  Eligible capital costs for phosphorus reduction 
14.28 	grants under subdivision 4, paragraph (b), include the final, incurred construction, 
14.29 	engineering, planning, and design costs.
14.30 		Subd. 4.Grant amounts and priorities. (a) Priority must be given to projects that 
14.31 	start construction on or after July 1, 2005.  If a facility's plan for a project is approved 
14.32 	by the agency before July 1, 2009, the amount of the grant is 75 percent of the eligible 
14.33 	capital cost of the project.  If a facility's plan for a project is approved by the agency on 
14.34 	or after July 1, 2009, the amount of the grant is 50 percent of the eligible capital cost of 
15.1 	the project.  Priority in awarding grants under this paragraph must be based on the date of 
15.2 	approval of the facility's plan for the project.
15.3 	(b) Projects that meet the eligibility requirements in subdivision 2 and have started 
15.4 	construction before July 1, 2005, are eligible for grants to reimburse up to 75 percent of 
15.5 	the eligible capital cost of the project, less any amounts previously received in grants from 
15.6 	other sources.  Application for a grant under this paragraph must be submitted to the 
15.7 	authority no later than June 30, 2007.  Priority for award of grants under this paragraph 
15.8 	must be based on the date of agency approval of the facility plan.
15.9 	(c) In each fiscal year that money is available for grants, the authority shall first 
15.10 	award grants under paragraph (a) to projects that met the eligibility requirements of 
15.11 	subdivision 2 by May 1 of that year.  The authority shall use any remaining money 
15.12 	available that year to award grants under paragraph (b). Grants that have been approved 
15.13 	but not awarded in a previous fiscal year carry over and must be awarded in subsequent 
15.14 	fiscal years in accordance with the priorities in this paragraph.
15.15 	(d) Disbursements of grants under this section by the authority to recipients must 
15.16 	be made for eligible project costs as incurred by the recipients, and must be made by the 
15.17 	authority in accordance with the project financing agreement and applicable state law.
15.18 		Subd. 5.Fees. The authority may charge the grant recipient a fee for its 
15.19 	administrative costs not to exceed one-half of one percent of the grant amount, to be 
15.20 	paid upon execution of the grant agreement.

15.21 	Sec. 14. [446A.074] SMALL COMMUNITY WASTEWATER TREATMENT 
15.22 	PROGRAM.
15.23 		Subdivision 1.Creation of fund. The authority shall establish a small community 
15.24 	wastewater treatment fund and shall make loans and grants from the fund as provided in 
15.25 	this section. Money in the fund is annually appropriated to the authority and does not 
15.26 	lapse.  The fund shall be credited with all loan repayments and investment income from 
15.27 	the fund, and servicing fees assessed under section 446A.04, subdivision 5.  The authority 
15.28 	shall manage and administer the small community wastewater treatment fund, and for 
15.29 	these purposes, may exercise all powers provided in this chapter.
15.30 		Subd. 2.Loans and grants. (a) The authority shall award loans as provided 
15.31 	in paragraph (b) and grants as provided in paragraph (c) to governmental units from 
15.32 	the small community wastewater treatment fund for projects to replace noncomplying 
15.33 	individual sewage treatment systems with a community wastewater treatment system or 
15.34 	systems meeting the requirements of section 115.55.  A governmental unit receiving a loan 
15.35 	or loan and grant from the fund shall own the community wastewater treatment systems 
16.1 	built under the program and shall be responsible, either directly or through a contract 
16.2 	with a private vendor, for all inspections, maintenance, and repairs necessary to assure 
16.3 	proper operation of the systems.
16.4 	(b) Loans may be awarded for up to 100 percent of eligible project costs as described 
16.5 	in this section.
16.6 	(c) When the area to be served by a project has a median household income below 
16.7 	the state average median household income, the governmental unit may receive 50 
16.8 	percent of the funding provided under this section in the form of a grant.  An applicant 
16.9 	may submit income survey data collected by an independent party if it believes the most 
16.10 	recent United States census does not accurately reflect the median household income 
16.11 	of the area to be served.
16.12 		Subd. 3.Project priority list. Governmental units seeking loans or loans and grants 
16.13 	from the small community wastewater treatment program shall first submit a project 
16.14 	proposal to the agency on a form prescribed by the agency.  A project proposal shall 
16.15 	include a compliance determination for all individual sewage treatment systems in the 
16.16 	project area. The agency shall rank project proposals on its project priority list used for 
16.17 	the water pollution control revolving fund under section 446A.07.
16.18 		Subd. 4.Applications. Governmental units with projects on the project priority 
16.19 	list shall submit applications to the authority on forms prescribed by the authority.  The 
16.20 	application shall include:
16.21 	(1) a list of the individual sewage treatment systems proposed to be replaced over a 
16.22 	period of up to three years;
16.23 	(2) a project schedule and cost estimate for each year of the project;
16.24 	(3) a financing plan for repayment of the loan; and 
16.25 	(4) a management plan providing for the inspection, maintenance, and repairs 
16.26 	necessary to assure proper operation of the systems.
16.27 		Subd. 5.Awards. The authority shall award loans or loans and grants as provided in 
16.28 	subdivision 2 to governmental units with approved applications based on their ranking 
16.29 	on the agency's project priority list.  The total amount awarded shall be based on the 
16.30 	estimated project costs for the portion of the project expected to be completed within 
16.31 	one year, up to an annual maximum of $500,000.  For projects expected to take more 
16.32 	than one year to complete, the authority may make a multiyear commitment for a period 
16.33 	not to exceed three years, contingent on the future availability of funds.  Each year of a 
16.34 	multiyear commitment must be funded by a separate loan or loan and grant agreement 
16.35 	meeting the terms and conditions in subdivision 6.  A governmental unit receiving a loan 
17.1 	or loan and grant under a multiyear commitment shall have priority for additional loan and 
17.2 	grant funds in subsequent years.
17.3 		Subd. 6.Loan terms and conditions. Loans from the small community wastewater 
17.4 	treatment fund shall comply with the following terms and conditions:
17.5 	(1) principal and interest payments must begin no later than two years after the 
17.6 	loan is awarded;
17.7 	(2) loans shall carry an interest rate of one percent;
17.8 	(3) loans shall be fully amortized within ten years of the first scheduled payment 
17.9 	or, if the loan amount exceeds $10,000 per household, shall be fully amortized within 20 
17.10 	years but not to exceed the expected design life of the system;
17.11 	(4) a governmental unit receiving a loan must establish a dedicated source or sources 
17.12 	of revenues for repayment of the loan and must issue a general obligation note to the 
17.13 	authority for the full amount of the loan; and 
17.14 	(5) each property owner to be served by a community wastewater treatment system 
17.15 	under this program must provide an easement to the governmental unit to allow access to 
17.16 	the system for management and repairs.
17.17 		Subd. 7.Special assessment deferral. (a) A governmental unit receiving a loan 
17.18 	under this section that levies special assessments to repay the loan may defer payment of 
17.19 	the assessments under the provisions of sections 435.193 to 435.195.
17.20 	(b) A governmental unit that defers payment of special assessments for one or more 
17.21 	properties under paragraph (a) may request deferral of that portion of the debt service on 
17.22 	its loan, and the authority shall accept appropriate amendments to the general obligation 
17.23 	note of the governmental unit.  If special assessment payments are later received from 
17.24 	properties that received a deferral, the funds received shall be paid to the authority with 
17.25 	the next scheduled loan payment.
17.26 		Subd. 8.Eligible costs. Eligible costs for small community wastewater treatment 
17.27 	loans and grants shall include the costs of planning, design, construction, legal fees, 
17.28 	administration, and land acquisition.
17.29 		Subd. 9.Disbursements. Loan and grant disbursements by the authority under this 
17.30 	section must be made for eligible project costs as incurred by the recipients, and must be 
17.31 	made in accordance with the project loan or grant and loan agreement and applicable 
17.32 	state law.
17.33 		Subd. 10.Audits. A governmental unit receiving a loan under this section must 
17.34 	annually provide to the authority for the term of the loan a copy of its annual independent 
17.35 	audit or, if the governmental unit is not required to prepare an independent audit, a copy of 
17.36 	the annual financial reporting form it provides to the state auditor.

18.1 	Sec. 15. [446A.075] TOTAL MAXIMUM DAILY LOAD GRANTS.
18.2 		Subdivision 1.Program established. When money is appropriated for grants under 
18.3 	this program, the authority shall make grants to municipalities to cover up to one-half 
18.4 	the cost of wastewater treatment or stormwater projects made necessary by wasteload 
18.5 	reductions under total maximum daily load required by section 303(d) of the federal Clean 
18.6 	Water Act, United States Code, title 33, section 1313(d).
18.7 		Subd. 2.Grant application. Application for a grant shall be made to the authority 
18.8 	on forms prescribed by the authority for the total maximum daily load grant program, with 
18.9 	additional information as required by the authority, including a project schedule and cost 
18.10 	estimate for the work necessary to comply with the point source wasteload allocation.  In 
18.11 	accordance with section 116.182, the Pollution Control Agency shall:
18.12 	(1) calculate the essential project component percentage, which shall be multiplied 
18.13 	by the total project cost to determine the eligible project cost; and 
18.14 	(2) review and certify approved projects to the authority.
18.15 		Subd. 3.Project priorities. When money is appropriated for grants under this 
18.16 	program, the authority shall reserve money for projects expected to start construction in 
18.17 	the next 12 months in the order that:
18.18 	(1) their total maximum daily load was approved by the United States Environmental 
18.19 	Protection Agency;
18.20 	(2) their grant application is received by the authority; and 
18.21 	(3) have the greatest load reduction as determined by the Pollution Control Agency. 
18.22 	The authority shall reserve money for projects in an amount based on their most recent 
18.23 	cost estimates submitted to the authority or the as-bid costs, whichever is less.
18.24 		Subd. 4.Grant approval. The authority shall make a grant to a municipality, as 
18.25 	defined in section 116.182, subdivision 1, only after:
18.26 	(1) the commissioner of the Minnesota Pollution Control Agency has certified to the 
18.27 	United States Environmental Protection Agency a total maximum daily load for identified 
18.28 	waters of this state that includes a point source wasteload allocation;
18.29 	(2) the Environmental Protection Agency has approved the total maximum daily 
18.30 	load;
18.31 	(3) a municipality for which money is reserved has submitted the as-bid costs for its 
18.32 	wastewater treatment or stormwater projects to the authority;
18.33 	(4) the Pollution Control Agency has reviewed and certified the project to the 
18.34 	authority; and 
18.35 	(5) the authority has determined that the additional financing necessary to complete 
18.36 	the project has been committed from other sources.
19.1 		Subd. 5.Grant disbursement. Disbursement of a grant shall be made for eligible 
19.2 	project costs as incurred by the municipality and in accordance with a project financing 
19.3 	agreement and applicable state and federal laws and rules governing the payments.
19.4 		Subd. 6.Fees. The authority may charge the grant recipient a fee for its 
19.5 	administrative costs not to exceed one-half of one percent of the grant amount, to be 
19.6 	paid upon execution of the grant agreement.

19.7 	Sec. 16. Minnesota Statutes 2004, section 276.04, subdivision 2, is amended to read:
19.8 		Subd. 2.Contents of tax statements.  (a) The treasurer shall provide for the printing 
19.9 	of the tax statements.  The commissioner of revenue shall prescribe the form of the 
19.10 	property tax statement and its contents.  The statement must contain a tabulated statement 
19.11 	of the dollar amount due to each taxing authority and the amount of the state tax from the 
19.12 	parcel of real property for which a particular tax statement is prepared. The dollar amounts 
19.13 	attributable to the county, the state tax, the voter approved school tax, the other local 
19.14 	school tax, the township or municipality, and the total of the metropolitan special taxing 
19.15 	districts as defined in section 275.065, subdivision 3, paragraph (i), must be separately 
19.16 	stated.  The amounts due all other special taxing districts, if any, may be aggregated.  If the 
19.17 	county levy under this paragraph includes an amount for a lake improvement district as 
19.18 	defined under sections 103B.501 to 103B.581, the amount attributable for that purpose 
19.19 	must be separately stated from the remaining county levy amount.  The amount of the tax 
19.20 	on homesteads qualifying under the senior citizens' property tax deferral program under 
19.21 	chapter 290B is the total amount of property tax before subtraction of the deferred property 
19.22 	tax amount.  The amount of the tax on contamination value imposed under sections 270.91 
19.23 	to 270.98, if any, must also be separately stated. The fee imposed under section 114D.40 
19.24 	must be listed on a separate line following the special assessment line on the statement. 
19.25 	It shall be called the "State Clean Water Fee." The dollar amounts, including the dollar 
19.26 	amount of any special assessments, may be rounded to the nearest even whole dollar.  
19.27 	For purposes of this section whole odd-numbered dollars may be adjusted to the next 
19.28 	higher even-numbered dollar.  The amount of market value excluded under section 273.11, 
19.29 	subdivision 16, if any, must also be listed on the tax statement.
19.30 	(b) The property tax statements for manufactured homes and sectional structures 
19.31 	taxed as personal property shall contain the same information that is required on the 
19.32 	tax statements for real property.
19.33 	(c) Real and personal property tax statements must contain the following information 
19.34 	in the order given in this paragraph. The information must contain the current year tax 
20.1 	information in the right column with the corresponding information for the previous year 
20.2 	in a column on the left:
20.3 	(1) the property's estimated market value under section 273.11, subdivision 1;
20.4 	(2) the property's taxable market value after reductions under section 273.11, 
20.5 	subdivisions 1a and 16;
20.6 	(3) the property's gross tax, calculated by adding the property's total property tax to 
20.7 	the sum of the aids enumerated in clause (4);
20.8 	(4) a total of the following aids:
20.9 	(i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C, 
20.10 	and 127A;
20.11 	(ii) local government aids for cities, towns, and counties under chapter 477A; and
20.12 	(iii) disparity reduction aid under section 273.1398;
20.13 	(5) for homestead residential and agricultural properties, the credits under section 
20.14 	273.1384;
20.15 	(6) any credits received under sections 273.119; 273.123; 273.135; 273.1391; 
20.16 	273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received 
20.17 	under section 273.135 must be separately stated and identified as "taconite tax relief"; and
20.18 	(7) the net tax payable in the manner required in paragraph (a).
20.19 	(d) If the county uses envelopes for mailing property tax statements and if the county 
20.20 	agrees, a taxing district may include a notice with the property tax statement notifying 
20.21 	taxpayers when the taxing district will begin its budget deliberations for the current 
20.22 	year, and encouraging taxpayers to attend the hearings.  If the county allows notices to 
20.23 	be included in the envelope containing the property tax statement, and if more than 
20.24 	one taxing district relative to a given property decides to include a notice with the tax 
20.25 	statement, the county treasurer or auditor must coordinate the process and may combine 
20.26 	the information on a single announcement.
20.27 	The commissioner of revenue shall certify to the county auditor the actual or 
20.28 	estimated aids enumerated in clause (4) that local governments will receive in the 
20.29 	following year.  The commissioner must certify this amount by January 1 of each year.

20.30 	Sec. 17. Minnesota Statutes 2004, section 276.112, is amended to read:
20.31 	276.112 STATE PROPERTY TAXES; COUNTY TREASURER.
20.32 	On or before January 25 each year, for the period ending December 31 of the 
20.33 	prior year, and on or before June 29 each year, for the period ending on the most recent 
20.34 	settlement day determined in section 276.09, and on or before December 2 each year, for 
20.35 	the period ending November 20, the county treasurer must make full settlement with the 
21.1 	county auditor according to sections 276.09, 276.10, and 276.111 for all receipts of state 
21.2 	property taxes levied under section 275.025, and the state-imposed fee under section 
21.3 	114D.40,and must transmit those receipts to the commissioner of revenue by electronic 
21.4 	means.

21.5 	Sec. 18. Minnesota Statutes 2004, section 290A.03, subdivision 11, is amended to read:
21.6 		Subd. 11.Rent constituting property taxes.  "Rent constituting property taxes" 
21.7 	means (i) 19 percent of the gross rent actually paid in cash, or its equivalent, or the portion 
21.8 	of rent paid in lieu of property taxes, in any calendar year by a claimant for the right 
21.9 	of occupancy of the claimant's Minnesota homestead in the calendar year, and which 
21.10 	rent constitutes the basis, in the succeeding calendar year of a claim for relief under this 
21.11 	chapter by the claimant; plus (ii) the amount of the state clean water fee imposed on 
21.12 	the rental unit under section 114D.40, allocated to multiple renters, if appropriate, as 
21.13 	prescribed under subdivision 8, paragraph (f).

21.14 	EFFECTIVE DATE. This section is effective for claims in 2007 and thereafter 
21.15 	based on rent and fees paid in 2006 and thereafter.

21.16 	Sec. 19. Minnesota Statutes 2004, section 290A.03, subdivision 13, is amended to read:
21.17 		Subd. 13.Property taxes payable.  "Property taxes payable" means the property 
21.18 	tax plus the state clean water fee imposed under section 114D.40 exclusive of special 
21.19 	assessments, penalties, and interest payable on a claimant's homestead after deductions 
21.20 	made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, and any other 
21.21 	state paid property tax credits in any calendar year, and after any refund claimed and 
21.22 	allowable under section 290A.04, subdivision 2h, that is first payable in the year that the 
21.23 	property tax is payable.  In the case of a claimant who makes ground lease payments, 
21.24 	"property taxes payable" includes the amount of the payments directly attributable to the 
21.25 	property taxes assessed against the parcel on which the house is located.  No apportionment 
21.26 	or reduction of the "property taxes payable" shall be required for the use of a portion of the 
21.27 	claimant's homestead for a business purpose if the claimant does not deduct any business 
21.28 	depreciation expenses for the use of a portion of the homestead in the determination of 
21.29 	federal adjusted gross income.  For homesteads which are manufactured homes as defined 
21.30 	in section 273.125, subdivision 8, and for homesteads which are park trailers taxed as 
21.31 	manufactured homes under section 168.012, subdivision 9, "property taxes payable" shall 
21.32 	also include 19 percent of the gross rent paid in the preceding year for the site on which the 
21.33 	homestead is located.  When a homestead is owned by two or more persons as joint tenants 
21.34 	or tenants in common, such tenants shall determine between them which tenant may claim 
22.1 	the property taxes payable on the homestead.  If they are unable to agree, the matter shall 
22.2 	be referred to the commissioner of revenue whose decision shall be final.  Property taxes 
22.3 	are considered payable in the year prescribed by law for payment of the taxes.
22.4 	In the case of a claim relating to "property taxes payable," the claimant must have 
22.5 	owned and occupied the homestead on January 2 of the year in which the tax is payable 
22.6 	and (i) the property must have been classified as homestead property pursuant to section 
22.7 	273.124, on or before December 15 of the assessment year to which the "property taxes 
22.8 	payable" relate; or (ii) the claimant must provide documentation from the local assessor 
22.9 	that application for homestead classification has been made on or before December 15 
22.10 	of the year in which the "property taxes payable" were payable and that the assessor has 
22.11 	approved the application.

22.12 	EFFECTIVE DATE. This section is effective for claims in 2006 and thereafter 
22.13 	based on taxes payable in 2006 and thereafter.

22.14 	Sec. 20. APPROPRIATIONS.
 22.15 		Subdivision 1.General provisions. The appropriations in this section are from 
22.16 	the environmental fund and are available for the fiscal years ending June 30, 2006, and 
22.17 	June 30, 2007. Unless otherwise specified in this section, these appropriations do not 
22.18 	cancel and remain available until June 30, 2007. Appropriations in this section that are 
22.19 	encumbered under contract, including grant contract, on or before June 30, 2007, are 
22.20 	available until June 30, 2009.
22.21 		Subd. 2.Department of revenue; fee collection costs. $38,000 in fiscal year 2006 
22.22 	and $31,000 in fiscal year 2007 are appropriated to the Department of Revenue to pay 
22.23 	the costs of collection and administration of the clean water fees imposed in Minnesota 
22.24 	Statutes, section 114D.40.
22.25 		Subd. 3.Pollution control agency. The following amounts are appropriated to the 
22.26 	Pollution Control Agency for the purposes stated:
22.27 	(1) $1,000,000 in fiscal year 2006 is to assist counties in developing the list required 
22.28 	under Minnesota Statutes, section 114D.40, subdivision 4, paragraph (e), of persons 
22.29 	subject to clean water fees under Minnesota Statutes, section 114D.40, subdivision 3, 
22.30 	paragraphs (f) and (g);
22.31 	(2) $1,860,000 in fiscal year 2006 and $4,125,000 in fiscal year 2007 are for 
22.32 	statewide assessment of surface water quality and trends; of these amounts, up to 
23.1 	$1,010,000 in fiscal year 2006 and $1,960,000 in fiscal year 2007 are available for grants 
23.2 	or contracts to support citizen monitoring of surface waters; and 
23.3 	(3) $1,900,000 in fiscal year 2006 and $3,290,000 in fiscal year 2007 are to develop 
23.4 	TMDL's for waters listed on the United States Environmental Protection Agency approved 
23.5 	2004 impaired waters list; of this appropriation, up to $390,000 in fiscal year 2006 and 
23.6 	$1,140,000 in fiscal year 2007 are available for grants or contracts to develop TMDL's.
23.7 		Subd. 4.Agriculture department. The following amounts are appropriated to the 
23.8 	Department of Agriculture for the purposes stated:
23.9 	(1) $250,000 in fiscal year 2006 and $2,300,000 in fiscal year 2007 are for 
23.10 	agricultural best management practices low-interest loans to producers and rural 
23.11 	landowners and these funds remain available until expended; of these amounts, $200,000 
23.12 	in fiscal year 2006 and $2,100,000 in fiscal year 2007 are available for pass-through to 
23.13 	local governments and lenders for low-interest loans;
23.14 	(2) $350,000 in fiscal year 2006 and $800,000 in fiscal year 2007 are to expand 
23.15 	technical assistance to producers and conservation professionals on nutrient and pasture 
23.16 	management; target practices to sources of water impairments; coordinate federal and 
23.17 	state farm conservation programs to fully utilize federal conservation funds; and expand 
23.18 	conservation planning assistance for producers; of these amounts, $50,000 in fiscal year 
23.19 	2006 and $210,000 in fiscal year 2007 are available for grants or contracts to develop 
23.20 	nutrient and conservation planning assistance information materials; and 
23.21 	(3) $100,000 in fiscal year 2006 and $800,000 in fiscal year 2007 are for research, 
23.22 	evaluation, and effectiveness monitoring of agricultural practices in restoring impaired 
23.23 	waters; of these amounts, $600,000 in fiscal year 2007 is available for grants or contracts 
23.24 	for research, evaluations, and effectiveness monitoring of agricultural practices in 
23.25 	restoring impaired waters, including on-farm demonstrations.
23.26 		Subd. 5.Board of water and soil resources. The following amounts are 
23.27 	appropriated to the Board of Water and Soil Resources for restoration and prevention 
23.28 	actions as described in Minnesota Statutes, section 114D.20, subdivisions 6 and 7:
23.29 	(1) $450,000 in fiscal year 2006 and $5,750,000 in fiscal year 2007 are for targeted 
23.30 	nonpoint restoration cost-share and incentive payments; of these amounts, up to $450,000 
23.31 	in fiscal year 2006 and $5,450,000 in fiscal year 2007 are available for grants to soil 
23.32 	and water conservation districts through the state cost-share program authorized under 
23.33 	Minnesota Statutes, section 103C.501;
23.34 	(2) $412,000 in fiscal year 2006 and $3,450,000 in fiscal year 2007 are for targeted 
23.35 	nonpoint restoration technical, compliance, and engineering assistance activities; of 
24.1 	these amounts, up to $412,000 in fiscal year 2006 and $3,250,000 in fiscal year 2007 
24.2 	are available for grants to soil and water conservation districts, watershed management 
24.3 	organizations, or counties to support nonpoint restoration implementation activities;
24.4 	(3) $200,000 in fiscal year 2007 is for reporting and evaluation of applied soil and 
24.5 	water conservation practices;
24.6 	(4) $2,400,000 in fiscal year 2007 is for grants to counties for implementation of 
24.7 	county individual sewage treatment systems programs through the local water resources 
24.8 	protection and management program under Minnesota Statutes, section 103B.3369;
24.9 	(5) $300,000 in fiscal year 2006 and $1,500,000 in fiscal year 2007 are for base and 
24.10 	challenge grants to support nonpoint source protection activities related to lake and river 
24.11 	protection and management through the local water resources protection and management 
24.12 	program under Minnesota Statutes, section 103B.3369; and 
24.13 	(6) $2,400,000 in fiscal year 2007 is for grants to soil and water conservation 
24.14 	districts for streambank, stream channel, lakeshore, and roadside protection and restoration 
24.15 	projects through the state cost-share program under Minnesota Statutes, section 103C.501.
24.16 		Subd. 6.Department of natural resources. The following amounts are 
24.17 	appropriated to the Department of Natural Resources for the purposes stated:
24.18 	(1) $280,000 in fiscal year 2006 and $430,000 in fiscal year 2007 are for statewide 
24.19 	assessment of surface water quality and trends; and 
24.20 	(2) $100,000 in fiscal year 2006 and $4,050,000 in fiscal year 2007 are for restoration 
24.21 	of impaired waters and actions to prevent waters from becoming impaired; of these 
24.22 	amounts, up to $1,700,000 in fiscal year 2007 is available for grants and contracts for forest 
24.23 	stewardship planning and implementation, and for research, compliance, and monitoring.
24.24 		Subd. 7.Public facilities authority. $4,400,000 in fiscal year 2006 and $44,015,000 
24.25 	in fiscal year 2007 are appropriated to the Public Facilities Authority; of these amounts, 
24.26 	$4,400,000 in fiscal year 2006 and $17,000,000 in fiscal year 2007 are to the clean water 
24.27 	legacy capital improvements fund for grants under Minnesota Statutes, section 446A.073; 
24.28 	$4,582,000 in fiscal year 2007 is to the small community wastewater treatment fund for 
24.29 	loans and grants under Minnesota Statutes, section 446A.074; and $22,433,000 in fiscal 
24.30 	year 2007 is to the water pollution control revolving fund under Minnesota Statutes, 
24.31 	section 446.07, for wastewater treatment and stormwater projects, and for total maximum 
24.32 	daily load grants under Minnesota Statutes, section 446A.075.  Funds appropriated under 
24.33 	this subdivision do not cancel and are available until expended.

24.34 	Sec. 21. EFFECTIVE DATE.
 25.1 	Sections 1 to 15 are effective the day following final enactment.  Section 20 is 
25.2 	effective July 1, 2005.

25.3 	ARTICLE 2
25.4 	 CONSTITUTIONAL AMENDMENT

25.5 	Section 1. CONSTITUTIONAL AMENDMENT.
 25.6 	An amendment to the Minnesota Constitution is proposed to the people.  If the 
25.7 	amendment is adopted, a section will be added to article XI, to read:
25.8 	Sec. 15.  Beginning July 1, 2007, until June 30, 2016, the state sales and use tax 
25.9 	receipts equal to the state sales and use tax of one-eighth of one percent on sales and 
25.10 	uses taxable under the general state sales and use tax law, plus penalties and interest and 
25.11 	reduced by any refunds, are dedicated to the assessment, protection and restoration of the 
25.12 	state's lakes, rivers, streams, wetlands, and groundwater.  The money dedicated under 
25.13 	this section shall be appropriated by law.

25.14 	Sec. 2. SUBMISSION TO VOTERS.
 25.15 	The proposed amendment shall be submitted to the people at the 2006 general 
25.16 	election.  The question submitted shall be:
25.17 	"Shall the Minnesota Constitution be amended to provide funding beginning July 1, 
25.18 	2007, to protect and restore the state's lakes, rivers, streams, wetlands, and groundwater 
25.19 	by dedicating additional sales and use tax receipts equal to the state sales and use tax of 
25.20 	one-eighth of one percent on taxable sales until the year 2016? 
25.21 	Yes .......                                   No ........" 

25.22 	Sec. 3. EFFECTIVE DATE.
 25.23 	Sections 1 and 2 apply to sales and uses occurring after June 30, 2007.

25.24 	ARTICLE 3
25.25 	 CONFORMING CHANGES

25.26 	Section 1. [114D.45] CLEAN WATER ACCOUNT.
25.27 	The clean water legacy account in the environmental fund is established in the 
25.28 	Minnesota Constitution, article XI, section 15.  All money earned by the clean water 
25.29 	legacy account must be credited to the account in the environmental fund.

25.30 	Sec. 2. Minnesota Statutes 2004, section 297A.62, subdivision 1, is amended to read:
26.1 		Subdivision 1.Generally.  Except as otherwise provided in subdivision 2 or 3 or in 
26.2 	this chapter, a sales tax of 6.5 percent is imposed on the gross receipts from retail sales as 
26.3 	defined in section 297A.61, subdivision 4, made in this state or to a destination in this state 
26.4 	by a person who is required to have or voluntarily obtains a permit under section 297A.83, 
26.5 	subdivision 1. After June 30, 2007, an additional sales tax of 0.125 percent is imposed 
26.6 	under article XI, section 15, of the Minnesota Constitution, for the purposes of clean water.

26.7 	Sec. 3. Minnesota Statutes 2004, section 297A.94, is amended to read:
26.8 	297A.94 DEPOSIT OF REVENUES.
26.9 	(a) Except as provided in this section, the commissioner shall deposit the revenues, 
26.10 	including interest and penalties, derived from the taxes imposed by this chapter in the state 
26.11 	treasury and credit them to the general fund.
26.12 	(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic 
26.13 	account in the special revenue fund if:
26.14 	(1) the taxes are derived from sales and use of property and services purchased for 
26.15 	the construction and operation of an agricultural resource project; and
26.16 	(2) the purchase was made on or after the date on which a conditional commitment 
26.17 	was made for a loan guaranty for the project under section 41A.04, subdivision 3.
26.18 	The commissioner of finance shall certify to the commissioner the date on which the 
26.19 	project received the conditional commitment.  The amount deposited in the loan guaranty 
26.20 	account must be reduced by any refunds and by the costs incurred by the Department of 
26.21 	Revenue to administer and enforce the assessment and collection of the taxes.
26.22 	(c) The commissioner shall deposit the revenues, including interest and penalties, 
26.23 	derived from the taxes imposed on sales and purchases included in section 297A.61, 
26.24 	subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them 
26.25 	as follows:
26.26 	(1) first to the general obligation special tax bond debt service account in each fiscal 
26.27 	year the amount required by section 16A.661, subdivision 3, paragraph (b); and
26.28 	(2) after the requirements of clause (1) have been met, the balance to the general 
26.29 	fund.
26.30 	(d) The commissioner shall deposit the revenues, including interest and penalties, 
26.31 	collected under section 297A.64, subdivision 5, in the state treasury and credit them to the 
26.32 	general fund.  By July 15 of each year the commissioner shall transfer to the highway user 
26.33 	tax distribution fund an amount equal to the excess fees collected under section 297A.64, 
26.34 	subdivision 5, for the previous calendar year.
27.1 	(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and 
27.2 	for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and 
27.3 	penalties, transmitted to the commissioner under section 297A.65, must be deposited by 
27.4 	the commissioner in the state treasury as follows:
27.5 	(1) 50 percent of the receipts must be deposited in the heritage enhancement account 
27.6 	in the game and fish fund, and may be spent only on activities that improve, enhance, or 
27.7 	protect fish and wildlife resources, including conservation, restoration, and enhancement 
27.8 	of land, water, and other natural resources of the state;
27.9 	(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and 
27.10 	may be spent only for state parks and trails;
27.11 	(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and 
27.12 	may be spent only on metropolitan park and trail grants;
27.13 	(4) three percent of the receipts must be deposited in the natural resources fund, and 
27.14 	may be spent only on local trail grants; and
27.15 	(5) two percent of the receipts must be deposited in the natural resources fund, 
27.16 	and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and 
27.17 	Conservatory, and the Duluth Zoo.
27.18 	(f) The revenue dedicated under paragraph (e) may not be used as a substitute 
27.19 	for traditional sources of funding for the purposes specified, but the dedicated revenue 
27.20 	shall supplement traditional sources of funding for those purposes.  Land acquired with 
27.21 	money deposited in the game and fish fund under paragraph (e) must be open to public 
27.22 	hunting and fishing during the open season, except that in aquatic management areas or 
27.23 	on lands where angling easements have been acquired, fishing may be prohibited during 
27.24 	certain times of the year and hunting may be prohibited.  At least 87 percent of the money 
27.25 	deposited in the game and fish fund for improvement, enhancement, or protection of fish 
27.26 	and wildlife resources under paragraph (e) must be allocated for field operations.
27.27 	(g) The commissioner shall deposit the sales tax revenue collected under article 
27.28 	XI, section 15, of the Minnesota Constitution, in the state treasury for deposit in the 
27.29 	clean water legacy account.

27.30 	Sec. 4. EFFECTIVE DATE.
 27.31 	This article is effective November 15, 2006, if the constitutional amendment 
27.32 	proposed in article 2 is adopted by the voters.